Break even analysis

[atm84]

Does anyone know how to complete a break even analysis for an electrician.

I understand that Total Revenue = Total costs

The difficulty is for an electrician total revenue is a mixture of an Hourly rate and Materials sold.

If I base it purely on my hourly rate I only break even after 36 hours a week.

I hope to make a small profit from mark up on materials but as the materials that I sell will be different it's hard to do.

Does anyone have an experience of doing this before. Your helped would be much appreciated.

 

[HandySparks]

What exactly is the purpose of this 'break even analysis'? Why are you doing it?

 

[atm84]

I'm writing a business plan to obtain a loan and they have asked for a break even analysis. I could just base it on hours but then I only make a profit after 36 hours a week, which doesn't look particularly good. I know from experience that I will break even sooner than this but it's just putting it on paper.

 

[Leesparkykent]

Have you looked at the Barclays guide to writing a business plan? Its got lots of useful information.

 

[Kamikaze]

You have the added problem of having to factor the loan into the equation since once you have taken one out, there will be a new break even point.

 

[HandySparks]

How much are you paying yourself per week to arrive at the 36 hour break even figure?

 

[atm84]

£200 a week.

 

[atm84]

Yeah I've already factored the loan in. I think the only way that I can do it is calculate how much I need to invoice per day and then say that can come from labour and profit on materials

 

[HandySparks]

Where are you located and what's the hourly rate you're planning in?

 

[atm84]

You don't need to know that handy sparks. That personal info that I do not want to divulge here. I just asked for help on how to calculate break even when taking into account labour and profit from materials.

 

[Octopus]

£200 a week.

Are you serious? £200 per week for 36 hours?

 

[Octopus]

Where are you located and what's the hourly rate you're planning in?

Two very important questions that do deserve answers, and yes they do!

 

[atm84]

I'm ltd. I pay dividends out of the profits. I have high fixed costs due to wanting to pay the loan off quickly. But that's irrelevant here. Can anyone help how to calculate break even with labour and sales without having to give away too much personal info.

 

[Octopus]

Does anyone know how to complete a break even analysis for an electrician.

I understand that Total Revenue = Total costs

The difficulty is for an electrician total revenue is a mixture of an Hourly rate and Materials sold.

If I base it purely on my hourly rate I only break even after 36 hours a week.

I hope to make a small profit from mark up on materials but as the materials that I sell will be different it's hard to do.

Does anyone have an experience of doing this before. Your helped would be much appreciated.

What do you mean by Total Revenue = Total costs?

 

[atm84]

Two very important questions that do deserve answers, and yes they do!

My location is irrelevant when asking how to calculate break even

 

[atm84]

What do you mean by Total Revenue = Total costs?

Don't worry about it.

 

[Octopus]

I'm ltd. I pay dividends out of the profits. I have high fixed costs due to wanting to pay the loan off quickly. But that's irrelevant here. Can anyone help how to calculate break even with labour and sales without having to give away too much personal info.

Unless you provide actual figures this thread is pretty much meaningless. Do you realise that the changes in the last budget will undermine the tax efficiency of paying yourself dividends?

 

[atm84]

Admin close thread. I'm wasting my time

 

[HandySparks]

...If I base it purely on my hourly rate I only break even after 36 hours a week.

I hope to make a small profit from mark up on materials but as the materials that I sell will be different it's hard to do.

You don't need to know that handy sparks. That personal info that I do not want to divulge here. I just asked for help on how to calculate break even when taking into account labour and profit from materials.

OK, any financial projection of this sort is educated guesswork. So make an estimate of typical materials content in the week's work and calculate your mark up on that level of materials to incorporate into your invoicing amount.

BTW, I wasn't trying to pry. It's just that without the 'big picture', suggesting how to improve the modelling is going to be general rather than specific.

 

[Octopus]

Admin close thread. I'm wasting my time

IMHO this is because you are trying to do sums with important facts not being disclosed.

whether you pay yourself dividends, or however you still need a target income to begin with!